Macmahon eyes more job cuts

CONTRACTOR Macmahon Holdings is to make more job cuts as impacts from unpaid Mongolian coal work combine with the recent loss of a Pilbara iron ore-related contract.

Blair Price

In August, Macmahon stopped operating the Tavan Talgoi coal mine in Mongolia following disagreements with the mine owner Erdenes Tavan Tolgoi.

The cost for Macmahon had reached $US30 million ($A38 million) by the end of that month. In the following month Macmahon flagged that it may end up suing Mongolian government-owned Erdene for around $78 million.

However, Macmahon has revealed less about the figures associated with the Mongolian contract woes in 2015 but has announced a total impairment exceeding $A100 million for this financial year.

The end of Macmahon’s $260 million per annum contract for Fortescue Metal Group’s Christmas Creek iron ore mine also looms next month with Downer EDI winning an expanded iron ore services contract for this mine in February.

According to The West Australian, accounting firm KPMG is reviewing cost cutting measures at Macmahon with “dozens” of more redundancies expected.

The contractor is one month through a 90-day period to renegotiate a banking facility.

“Executive chairman Jim Walker last month said nothing was off limits under the review,” the newspaper reported.

“The company will soon consolidate corporate staff at premises near the airport after vacating its West Perth headquarters.”

Macmahon posted a $112 million net loss in the first half with a lot of that due to equipment write-downs.

Most read Archive

loader

Most read Archive